An integrated framework for improving supply chain performance

In 2009, Roland Berger Strategy Consultants [Roland Berger Strategy Consultants, (2009). Global SCM excellence study., p.5.] reported that 40% of 234 companies had the wrong priorities in regard to efficiency vs. responsiveness. In 2014, PricewaterhouseCoopers (PwC) and American Production and Inventory Control Society (APICS) [PwC and APICS, Sustainable supply chains: Making value the priority 2014] found that 76% of 500 supply chain executives identified sustainability as an important aspect of their supply chain. The results highlight the importance of achieving consistency between customer expectations, in terms of cost and service level, and supply chain performance in today’s competitive business environment. Despite this, however, no integrated supply chain design framework exists to control majority of the important functions related to supply chain strategy, structure, process and performance. The literature review showed that simulation is rarely considered at the strategic level, but the research experiments highlighted a number of ways in which simulation tools might be useful at this level, such as exploring the impact of strategic fit and decoupling points, and assessing different supply chain network configurations and policies. This research contributes to knowledge by designing and developing a framework that integrates strategy, process and resources, and allows the use of simulation tools to consider the three dimensions of efficiency, responsiveness and sustainability concurrently during the design process. The proposed framework is validated using a hypothetical supply chain network. Simulation allows performance to be assessed under a range of scenarios. The simulation experiments showed that under the suggested policies, efficiency improved from 25.38% to 30.58% and responsiveness rose from 18.37% to 32.78%. However, they also indicated that while policies oriented towards improving responsiveness had a positive impact on sustainability, those oriented towards improving efficiency had a negative impact. The significance of the research lies in its development of a supply chain design framework that could assist companies in achieving the optimum configuration of supply chain resources, thereby helping them reduce inventory, lower costs, enhance responsiveness and improve strategic focus in terms of design, execution and capital investments.